The Agreement
In a recent definitive agreement with BHP Billiton (UK) DDS, Lifezone Metals will now acquire a 17% interest in KNL or Kabanga Nickel Limited. This sparks the company’s majority ownership in the nickel project happening in Tanzania. KNL’s ownership is thus transferred to Lifezone, which holds an 84% stake in TNCL, also known as Tembo Nickel Corporation Limited, which oversees the project’s operations. The Government of Tanzania has the remaining 16% stake. Incidentally, Lifezone also gets 100% control of the nickel project offtake. In 2021, the company acquired the Kabanga Project, and in March last year, it began operations of a processing facility for multiple metals, including copper, cobalt, and nickel.
The Actual Deal
Here are the mentioned deal terms:
- $10m (£7.43m) fixed cash payment post-final investment decision (FID)
- The second cash payment linked to Lifezone’s share price is deferred after beginning the first commercial production
- Total consideration cap of $83m, reduced to $75m, subject to a separate verification through a Resettlement Action Plan Trigger Event
In addition to the above, BHP will have a 12-month lockup period for its Lifezone shares, and any potential share sales must be offered to Lifezone first.
Stakeholder Commitment and Value-Add
Chris Showalter, Lifezone’s CEO, remarked: “This marks a significant milestone for Lifezone as we consolidate ownership of the Kabanga nickel project. BHP has been a supportive and value-adding partner, whose investment has contributed to advancing the project. Their exit coincides with the project’s transition into its next stage of development.”
“Our focus remains on delivering a world-class, low-cost nickel project that benefits all stakeholders, including the Government of Tanzania and local communities.”
Furthermore, Lifezone receives strategic advisory and short-term financing from its partner, Standard Chartered Bank, which provides support for all progress towards FID and construction works. With potential lenders and export credit agencies showing enough interest, the Société Générale is offering advice on financing the project.
The founder and chair of Lifezone, Keith Lidell, was excited by the fact that the 100% ownership of Kanbanga Nickel Limited only facilitated the alignment of all company goals, including technical, commercial, and ESG strategies, even as the entity moves towards a final investment decision. He also added that Lifezone Metals Tanzania is committed to delivering the project responsibly and creating long-term value for all stakeholders involved. A feasibility study for the Kabanga project, along with its technical report summary, has been submitted to strengthen the project’s economic potential and create initial mineral reserves for a high-end nickel sulphide project.
Project Worth
The mineral reserves in the project are estimated to be approximately 52.2 million tonnes (mt). Out of this, Lifezone owns approximately 43.9 million tonnes – broken down as nickel (1.98%), copper (0.27%), and cobalt (0.15%).
The operational lifespan of the project is about 18 years, and the annual production rate runs to the tune of 3.4 mt.
How much will the project yield?
Nickel 902,000 tonnes (t)
Copper 134,000t
Cobalt 69,000t
Showalter also said that the mineral reserves declared will pave the way for robust economics and the final investment decision, planned for 2026. The project, he believes, will deliver strategic value and long-term advantages to the country, its citizens, and the critical metals supply chain.
Here’s what you need to know about Lifezone Metals
A modern metal company, Lifezone, has a proprietary Hydromet technology that is aimed at producing clean, lower-emission metals. These are targeted at the battery and EV markets. Lifezone Tanzania is one of the company’s key projects in what is considered one of the world’s largest untouched nickel sulphide deposits.
BHP Share Prices
Analysts are offering a fairly positive forecast for the next 12 months, with the average price standing at AU$42.48, a low forecast at AU$35.16, and a high forecast at AU$48.60. The average predicted change stays at 1.51%. It is worth noting that BHP, as a result of the current transaction, is expected to gain at least $83 million. Additionally, the exit also enables it to focus on its core priorities going forward. The BHP group had previously made headlines when it achieved record copper and iron ore production in the year ending June 30, 2025.
